Most parents are scratching their heads wondering the following in regards to college education for their children:

  1. How can I pay for college?
  2. How to pay for college without loans?
  3. How to pay for college without going broke? (covered in Part 2)
  4. How to pay for college without financial aid? (covered in Part 2)iStock_000056127768_Small

How can I pay for college?

The average cost of a state school is between $20-$25,000 per year. Private schools can go as high as $60,000 per year. Most of us just can not whip out our checkbooks and pen a check especially when 4 years of college will cost from $80-$200,000 for the full 4 years. To compound the concerns, the average time college students take to graduate is actually 5.8 years instead of 4. So one big hurdle to save you a bunch of money is to pick the right school. Matching your child’s scholarly interests and aptitude to the best school that also matches other criteria such as the right distance from home can be a daunting task especially when there are 900 schools to choose from! Changing majors and transferring schools is very expensive because it extends the time to a degree.

Another important item to be sure you do is file the FSAFA form on time. The deadline is February 15th of each year. Making sure you file correctly and understand what should be included and what can be excluded from the form can have a huge impact on financial aid options, even if you earn a large income.

How to pay for college without loans?

The options would include paying for college from your savings (includes 529 plans or UGMA accounts) and or scholarships. Student loan debt continues to pile up and it becomes a huge pile. Cumulative student loan debt nationwide exceeds $1.3 trillion. A recent U.S. Government Accountability Office study found that 706,000 households headed by those aged 65 or older have outstanding student loans. That’s only 3% of households but the debt they hold amounts to about $18.2 billion. 27% of those loans are in default. Having the right kind of student debt is also important. Several student loan options exist but understanding which are the best ones is an arduous task. It is not impossible to get through school without students loans but it is not clearly laid out anywhere to avoid the kind of student debt described in this paragraph.

Another option to reduce debt is to start out at a cheaper school. Get your basics out the way by going to a junior college. Make sure however that your credits will transfer to the 4 year school of choice.

The best iStock_000048122016_Smallway to avoid a lot of student debt however is to package your student to make him/her an attractive attendee at the school of their choice. Working at this can reduce a family’s out of pocket expense or need for loans by literally tens of thousands of dollars. How to do this effectively takes expert assistance an
d is not something you can google.

Work study programs available at these schools is also an attractive way to reduce the amount of money you would have to borrow.

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For the answers to questions 3 and 4 above see Part 2 with the same title.

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